Experienced investor and Property Secrets member Alan Richards believes Romania offers fabulous potential for those willing to take the trouble to hunt down the best buys.

But the Romanian property market is not for the unwary.

Alan bought his first BTL property in the UK back in 1988. He now owns five investment properties in the UK, two in Romania, plus land in the same country.

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So, Alan, tell us a little about your attitude to property investment

I came from a family of property investors. To me, investing in something as solid as property was second-nature. And I can honestly say I've never had a bad experience.

I do believe the key is to create a balanced portfolio - certainly, it is for me, because I regard property investment as my pension.

But I'm aware that attitudes have changed. 15-20 years ago people saw property simply as a safe and solid investment. They invested and that was that.

Nowadays, I believe there is more of a global dimension; more and more people are starting to think globally and they are more prepared to look for where the best growth is rather than confine themselves to their home market.

They expect faster growth and quicker turnover.

In my case, I'm looking at taking a larger part of my portfolio and playing with it a bit - basically looking at high growth opportunities. And, yes, there is undoubtedly a little more risk in these markets. I accept that. But the returns can make it very worthwhile.

So, what's so special about Romania?

I have to admit that for me, Romania is a natural choice.

I used to visit fairly regularly for work, I now have an engineering business based in Bucharest - and I met my Romanian wife there - I know it pretty well and now even speak some of the language. For me, it's like a second home.

But that only makes operating there as a property investor easier - it is certainly not a reason for investing per se.

The arguments for that, I believe, are clear - this is an early bird opportunity.

This market, while rising at an extraordinary rate, is still undeveloped and has a huge way to go.

The country is on course to join the EU in 2007 and we all know what is happening to property markets in the countries that joined the EU in 2004!

Property in Romania is booming, and land prices in particular are growing at a phenomenal rate.

But when you ask 'why Romania?' I suppose it's like a lot of markets in central and eastern Europe, the risk is not in investing, as such: it's all about the method of investment.

Can you explain what you mean by the method of investment?

Yes. Basically, to me, the arguments for investing in a country like Romania are clear and easy to see.

But the actual process - or the method - is the hard part - that's where the risk lies; that's where you can come unstuck as an investor.

But Romania is a growth market in which I can operate comfortably and that is how I eliminate - or almost eliminate - risk.

But isn't investing in Romania unacceptably risky for most people?

To be honest, the answer to that is probably, yes.

You certainly can't just get on a plane, rock up in Bucharest and buy an apartment.

Or, at least, you'd be pretty silly to do that!

No, you have to do your homework, or you can be badly bitten.

You really need to be careful about what you buy and where - pretty much the same as any property investment market.

The average investor needs help. What they need, in a nutshell, is someone they can trust.

And that is where my wife and I believe we've spotted a gap in the market - in helping people find people that are efficient and trustworthy. Through our own experiences, we can help investors find the right lawyer, accountant, someone, essentially, who speaks both languages fluently.

This is vital and it's a service not readily available in the country.

This is our business idea and we plan to help the first party of interested people in March when we take them over to look at opportunities. All of them have come to myself and my wife through word of mouth.

Agents generally charge between 2 and 4% commission and in the future we plan to charge these agents for any introductions.

But what about finance? Isn't that a problem?

This is not a market in which you want to borrow domestically to buy property.

The banking system is way behind the times. A bank account in Romania is basically a shoebox in which to put your money!

Borrowing is also very expensive. Simply, it's not an option - not yet, anyway.

But, this will inevitably change, and, as it does, so will property prices grow. All of which makes the place a true basement level opportunity.

So, yes, if you want to finance your purchase, you need to borrow at home. But I believe the rewards - certainly the ones I've experienced - have made this worthwhile.

Off-plan buying is not really available at the moment. It will come, but not just yet.

OK, so share some of your hot tips with us, Alan...

Well, I've come to the conclusion that buying land is key.

It is still very cheap - agricultural land, for example, which isn't going to be protected like in the UK - goes for around €1 - €1.5 a square metre, building land around 15-20 Euro per metre.

And you can pick up this kind of land right next to a hypermarket, for example.

If you buy land wisely, I think it's possible to make a killing.

Land, particularly along Romania's Black Sea coast, is starting to be bought up - simply because Bulgaria is next door and people can see what's happened to the coast there. Whatever you think of the Bulgarian market, if you had bought land before the building boom, you'd be laughing now.

Land is going up faster than anything else - but, again, it's important not to just buy anything. You need to be very selective.

Bucharest is surprisingly expensive now, so I'd tip other major cities.

I especially like Brasov.

It's a great location, with a mountain backdrop that delivers trekking in the summer and skiing in the winter. It's beautiful and it's also developing as a business centre - banks and big companies are moving in.

Plus, right now, to fly direct to Romania you have to go into Bucharest. Well, Brasov is building a new airport that will be capable of handling international flights. It's due to be completed by 2008

This is a big plus factor and will inevitably attract investment away from Bucharest.

Finally, Alan, can you give us some idea of the capital growth you've seen in Romania?

Well, we bought some land, admittedly with planning permission, last summer and it's now worth almost double. Obviously, that kind of growth cannot go on indefinitely. But my best guess is that there are at least another two or three years left.

We bought a flat in Bucharest - our first apartment - four or five years ago for $12,000. It's now worth $50,000.

Yields, too, are pretty good. Around €400 per month on a €60,000 flat in Brasov, which is a yield of 8%.

The rental market is buoyant because borrowing is difficult and, on top of that, even if people have the income and the deposit, they often have no credit history or verifiable income.

But wages are rising fast and inflation is falling, from about 30-40% around five years ago, to under 10% today.

So, all in all, this is not a risk-free market and not for anyone who isn't prepared to do their homework.

But, if they are ready to do the research and can make the right contacts, I believe it's a fantastic place to invest - but then I'm biased!

Best of luck with your investments!

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